Disposal of

Ashtenne Holdings PLC announces that Ashtenne and its subsidiaries entered into a conditional agreement on 29 June 2004 to dispose of certain properties for £132.7 million to the Ashtenne Industrial Fund, in which Ashtenne currently has a 13 per cent. interest, and for which it is asset manager. In addition, Ashtenne announces its intention to return a significant proportion of these sale proceeds to shareholders.

In view of its size, the Disposal is conditional on approval by Ashtenne shareholders at an Extraordinary General Meeting.

Disposal Properties
The properties to be sold to the AIF, which were valued on behalf of the Company by CB Richard Ellis as at 29 June 2004 at £131.9 million, the difference between this valuation and the consideration proceeds relates to transaction cost savings. The portfolio comprises 82 industrial and office properties, typically dating from early 1900&acute;s to 2002. These properties have a current net annual rent receivable of approximately £10.3 million at the date of the valuation report. The majority of the properties were acquired as part of the acquisition from Mentmore plc last year, with the balance being the industrial elements of mixed portfolios purchased over the last three years.

Reasons for and benefits of the Disposal
The Directors believe that the current strength of the secondary industrial investment market presents an opportunity to realise substantial value gains for shareholders. Ashtenne identified the Disposal Properties, being the majority of the industrial and office investment property which the Group owns in the UK, as a portfolio which would be extremely attractive in the current market. The strength of the portfolio is its robust income flow derived from the heavily diversified tenant base and its potential for growth in rent and occupancy levels. The Directors decided to give the AIF the opportunity to acquire the Disposal Properties at current market value prior to marketing them. To avoid any conflict of interest, Morley Fund Management, as fund manager of AIF, procured an independent valuation of the Disposal Properties, carried out an appraisal of the opportunity and bid for the Disposal Properties on behalf of the AIF.

The Disposal, which reflects 7.5 per cent. net initial yield and 8.5 per cent. equivalent yield, will generate £132.7 million cash, before disposal costs and tax, for the Company. The Board has considered the investment opportunities currently available to it and, in light of the current buoyant conditions, believes that shareholder value will be maximised by returning capital to shareholders.